F&O Manual | Bullish momentum propels Nifty to record highs; Key support at 20,100

Bulls persist in their push as the benchmark indices rally upward hitting new highs, fueled by favorable global cues. Among sectors, auto and PSU Bank are up 1 percent each.

At 12 PM, the Sensex was up 268.87 points or 0.40 percent at 67,787.87, and the Nifty was up 77.20 points or 0.38 percent at 20,180.30. About 1,806 shares advanced, 1,183 shares declined, and 108 shares unchanged.

Bars reflect changes in open interest (OI) during the day. The red bars show call option OI and the green put option OI

On the option front, 20,100 Put holds significant OI, indicating immediate support on the downsides. Nifty’s ability to maintain levels well above the July swing high of 19,991.85 bodes well for bullish sentiment. The indicators are suggesting overbought conditions, underscoring the inherent strength in the market.

As per Sameet Chavan, Head Research, Technical and Derivatives, Angel One, “The recommended strategy should remain focused on buying during intraday dips. In this context, the psychological support levels are situated at 20,000. On the flip side, as the Nifty is in uncharted territory, it’s advisable to consider reciprocal retracement, with the next resistance appearing around 20200, followed by 20,450.”

It’s worth noting that the Nifty has already gained approximately 900 points in the span of around 10 days, and going forward, the pace of the rally may not be as swift, added Chavan. Therefore, traders are advised to adopt a stock-centric approach, as it is likely to offer opportunities for outperformance.

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Among individual stocks Bajaj Auto, Idea and Heromotoco saw a bullish setup, while IOC, BPCL Ltd and Indigo saw a bearish build-up.

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